Liberal Democratic Party Remarks

FRGNT OFFICE
ROUTING SLIP
AMB
DCM
A/EX
UNITED STATES GOVERNMENT
memorandum
oATE , December 17, 1985
REPLY TO ,/ JJ}
ATTN oF, IO - Carol E. Ludwig C,~c(;h
susJEcT, Transcript of Your December 12 Remarks to the LDP Panel
TO: The Ambassador ~
THRU: DCM - Minister An~rson
Per your request at today's staff meeting, I am attaching
an original and a copy of the transcript of your remarks
to the LDP Roundtable on December 12. Please let us know
if you also need an audio cassette tape of your remarks.
Attachments: A/S
Clearance:DPAO:Jinman
OPTIONAL FORM NO. 10
(REV. 1-80)
GSA FPMR (41 CFR) 101-11.6
5010-1 t4
GPO ' 1984 0 - 4 33- 783
Mike Mansfield Papers, Series 32, Box 3, Folder 31, Mansfield Library, University of Montana.
In response to your question, I am not as pessimistic as the
question sounds, nor am I as optimistic as I'd like to be about
the relationship between our two countries. We've come a long
way since the end of the Pacific War and in the process we have
developed, as good friends will, differences of opinion on
various matters primarily in the trade area. In defense we
have an excellent relationship. We are very appreciative of
what the Japanese have been able to accomplish in undertaking a
share of the burden in their own self-defense. Our different
cultures, I think, are being better understood in each of our
countries, and out of that can come nothing but better
understanding and greater appreciation. In the matter of the
governments themselves a very close personal relationship is
coming into being between your Prime Minister and my President
and a "Shintaro and George" relationship has developed as a
result o= some twenty odd meetings between our Secretary of
State and your Minister for Foreign Affairs. There is much
more investment in the United States by Japan and increasing in
small amounts more U.S. investment in Japan. We are very
pleased by the recent announcement by Toyota that they were
going to invest BOO million dollars in a plant in Kentucky. If
you add up all the direct Japanese investments in the United
States that brings the figure up to 3 billion 640 million
dollars. ~hat is a lot of money, that is a lot of investment
and it will mean a lot of jobs.
But the big issue is trade and the big figure was a 37 billion
Mike Mansfield Papers, Series 32, Box 3, Folder 31, Mansfield Library, University of Montana.
- 2 -
dollar deficit last year which we estimate will be somewhere in
the vicinity of 50 billion dollars this year. Reputable
economists have indicated that they think that that deficit
will increase further in 1986 and 1987. The figure is much to
high. In a sense it is intolerable. And something has to be
done to bring about measures which will decrease that surplus
on your part, decrease that deficit on our part and I think
that steps have been undertaken to bring about a modicum of
corrections in the months and the years ahead but that takes
time. We think it is time to take more action on both sides.
We think it is very necessary that Japan open its markets as
completely as possible even to give into consideration to
perhaps entering into a free trade ~reaty with the United
States as the United States has with Israel and as we are now
considering a treaty with Canada on the same basis. We
appreciate the efforts which the Prime Minister Mr. Nakasone,
the Japanese government and people are making. We would like
to see greater access, that is the key word, to your markets.
And we would like to see, by the end of this year if at all
possible, the end of 1985, completion of the Moss negotiations
in three particular sectors. One electronics , two
telecommunications, and three pharmaceuticals and medical
devices. The fourth lumber and wood products would have to
wait until next year but there we would hope that by next year
substantial reductions in the tari~f on those products would be
announced and implemented so that we could get that particular
issue out of the way.
Mike Mansfield Papers, Series 32, Box 3, Folder 31, Mansfield Library, University of Montana.
- 3 -
First, let me say that I have listened with interest to what my
friends Mr. Inayama, the head of ( ... ?), and Mr. Ezaki, a
memher of the Diet and former cabinet members, had to say. By
in large I agree with them to a great extent. I think what
they have said is of great interest and certainly considerable
study. As far as setting a definite trade figure is concerned
I would be very hesitant to answer that question in the
affirmative and come up with a positive figure. One reason is
if the Japanese did everything that we asked them to do, it's
my feeling that it would do no more than reduce the deficit by
ten to may be fifteen billion dollars at the outside. Still
leaving a huge surplus in Japan's favor, still giving us a
tremendous deficit in our bilateral trade relationship. I
would agree with Mr. Inayama that this is not a bilateral
problem but rather a global problem. And I think also that
while we want Japan to open its markets as completely as
possible perhaps even considering in the long run the abolition
of tariffs and quotas, it would still leave you in a very
favorable position. It is a global problem. ~he last year it
wasn't just Japan's 37 billion dollar surplus with us, our
deficit, but a 123.3 billion dollar deficit that the United
States had with the rest of the world.
There are things that each of us must do separately and some
which we must do together. For example, Mr. Ezaki mentioned
the GS agreement out of the Plaza Botel last September, the
Mike Mansfield Papers, Series 32, Box 3, Folder 31, Mansfield Library, University of Montana.
- 4 -
Plaza Hotel in New York City, at which time our Secretary of
the Treasury, Mr. Jim Baker, and your Secretary of Finance, Mr.
Takeshida, along with three of their colleagues entered into an
agreement to cope with the divergences in the exchange rate.
That was a excellent move. The results have been good an~
incidentally, I believe the genesis could be found in the
meetings in Tokyo last June or July between our Treasury
Secretary and your Finance Minister. So that's working out.
On the matter of interest rates, that 1s an American
responsibility.
responsibility.
On the matter of deficits, that is an American
So there are things which we can do, which
will benefit each other, perhaps hurt in the process, but I
think we've got to recognize that the important thing is to
save the international trading system which has been so
beneficial to Japan and which would be very disastrous to Japan
if it ever broke down and do so in the interest of the well
being of the rest of the world, not just ourselves alone.
I think the more Japanese investment we get in the United
States the better of we'll both be. But I think that's
something which should work both ways. We'd like to see more
U.S. investments in Japan. \fuen I was on home leave in the
latter part of October and almost all of November, I had the
opportunity to meet with about 26 members of the Senate almost
all of them old colleagues of mine, a few new ones, the joint
leadership there and the joint leadership in the House of
Mike Mansfield Papers, Series 32, Box 3, Folder 31, Mansfield Library, University of Montana.
- 5 -
Representatives plus some of its members. The feeling I
detected was one of onus and continued frustration about the
trade inbalance between Japan and the United States. I seemed
to detect also that, while there was a feeling of quite, that
there was an uncertainty as to just what the Congress would do
to face up to its problem. lfhat I am trying to say in effect,
that perhaps we have moved away from considering the trade
problem as an economic issue and must recognize that economics
in that respect has become politicized and emotionalized. An0
that of course takes you out of the realm of facts and figures
and brings you into the realm of elections and re-eJections in
the light. So I would hope that on the basis of what we have
said here this afternoon I find myself agreeing in large part
with Mr. Inayama and Mr. Ezaki, old friends whom have known for
year, whose judgments I value greatly and that we have to
consider extra factors beyond the economics of the situation
and if necessary in both countries make the necessary political
sacrifices to try to put this oroblem behind us. It is not
going to go away easily. It is qoing to become worst before it
gets better. And my hope is that if we can get by the next
year and each in our country's do what has to be done, opening
markets in this country, coping with the deficit in my country,
that we'll be able to reach a reasonable conclusion,
accommodation or compromise in our difficulties. It is a tough
job and it is going to call on all the politicians have to deal
with it. Incidentally, I think that the only person standing
between protectionist legislation and its enactment in the
Mike Mansfield Papers, Series 32, Box 3, Folder 31, Mansfield Library, University of Montana.
- 6 -
United States is President Reagan. But his defenses are
becoming weaker as the Congress offenses become stronger and as
a result he has to give here and give there. But at least he's
maintained the line so far in preventing protectionist
legislation in my countrv and it would help him greatly to
continue to do so if we could have far greater access to the
markets of Japan than we have at the present time. But it is a
pleasure to appear on a program of this nature with such
friends of integrity, knowledge and understanding as Mr.
Inayama and Mr. Ezaki.
Thank you very much it has been a pleasure.
side deficiencies, on your side access.
Remember on our
Mike Mansfield Papers, Series 32, Box 3, Folder 31, Mansfield Library, University of Montana.

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Transcript

FRGNT OFFICE
ROUTING SLIP
AMB
DCM
A/EX
UNITED STATES GOVERNMENT
memorandum
oATE , December 17, 1985
REPLY TO ,/ JJ}
ATTN oF, IO - Carol E. Ludwig C,~c(;h
susJEcT, Transcript of Your December 12 Remarks to the LDP Panel
TO: The Ambassador ~
THRU: DCM - Minister An~rson
Per your request at today's staff meeting, I am attaching
an original and a copy of the transcript of your remarks
to the LDP Roundtable on December 12. Please let us know
if you also need an audio cassette tape of your remarks.
Attachments: A/S
Clearance:DPAO:Jinman
OPTIONAL FORM NO. 10
(REV. 1-80)
GSA FPMR (41 CFR) 101-11.6
5010-1 t4
GPO ' 1984 0 - 4 33- 783
Mike Mansfield Papers, Series 32, Box 3, Folder 31, Mansfield Library, University of Montana.
In response to your question, I am not as pessimistic as the
question sounds, nor am I as optimistic as I'd like to be about
the relationship between our two countries. We've come a long
way since the end of the Pacific War and in the process we have
developed, as good friends will, differences of opinion on
various matters primarily in the trade area. In defense we
have an excellent relationship. We are very appreciative of
what the Japanese have been able to accomplish in undertaking a
share of the burden in their own self-defense. Our different
cultures, I think, are being better understood in each of our
countries, and out of that can come nothing but better
understanding and greater appreciation. In the matter of the
governments themselves a very close personal relationship is
coming into being between your Prime Minister and my President
and a "Shintaro and George" relationship has developed as a
result o= some twenty odd meetings between our Secretary of
State and your Minister for Foreign Affairs. There is much
more investment in the United States by Japan and increasing in
small amounts more U.S. investment in Japan. We are very
pleased by the recent announcement by Toyota that they were
going to invest BOO million dollars in a plant in Kentucky. If
you add up all the direct Japanese investments in the United
States that brings the figure up to 3 billion 640 million
dollars. ~hat is a lot of money, that is a lot of investment
and it will mean a lot of jobs.
But the big issue is trade and the big figure was a 37 billion
Mike Mansfield Papers, Series 32, Box 3, Folder 31, Mansfield Library, University of Montana.
- 2 -
dollar deficit last year which we estimate will be somewhere in
the vicinity of 50 billion dollars this year. Reputable
economists have indicated that they think that that deficit
will increase further in 1986 and 1987. The figure is much to
high. In a sense it is intolerable. And something has to be
done to bring about measures which will decrease that surplus
on your part, decrease that deficit on our part and I think
that steps have been undertaken to bring about a modicum of
corrections in the months and the years ahead but that takes
time. We think it is time to take more action on both sides.
We think it is very necessary that Japan open its markets as
completely as possible even to give into consideration to
perhaps entering into a free trade ~reaty with the United
States as the United States has with Israel and as we are now
considering a treaty with Canada on the same basis. We
appreciate the efforts which the Prime Minister Mr. Nakasone,
the Japanese government and people are making. We would like
to see greater access, that is the key word, to your markets.
And we would like to see, by the end of this year if at all
possible, the end of 1985, completion of the Moss negotiations
in three particular sectors. One electronics , two
telecommunications, and three pharmaceuticals and medical
devices. The fourth lumber and wood products would have to
wait until next year but there we would hope that by next year
substantial reductions in the tari~f on those products would be
announced and implemented so that we could get that particular
issue out of the way.
Mike Mansfield Papers, Series 32, Box 3, Folder 31, Mansfield Library, University of Montana.
- 3 -
First, let me say that I have listened with interest to what my
friends Mr. Inayama, the head of ( ... ?), and Mr. Ezaki, a
memher of the Diet and former cabinet members, had to say. By
in large I agree with them to a great extent. I think what
they have said is of great interest and certainly considerable
study. As far as setting a definite trade figure is concerned
I would be very hesitant to answer that question in the
affirmative and come up with a positive figure. One reason is
if the Japanese did everything that we asked them to do, it's
my feeling that it would do no more than reduce the deficit by
ten to may be fifteen billion dollars at the outside. Still
leaving a huge surplus in Japan's favor, still giving us a
tremendous deficit in our bilateral trade relationship. I
would agree with Mr. Inayama that this is not a bilateral
problem but rather a global problem. And I think also that
while we want Japan to open its markets as completely as
possible perhaps even considering in the long run the abolition
of tariffs and quotas, it would still leave you in a very
favorable position. It is a global problem. ~he last year it
wasn't just Japan's 37 billion dollar surplus with us, our
deficit, but a 123.3 billion dollar deficit that the United
States had with the rest of the world.
There are things that each of us must do separately and some
which we must do together. For example, Mr. Ezaki mentioned
the GS agreement out of the Plaza Botel last September, the
Mike Mansfield Papers, Series 32, Box 3, Folder 31, Mansfield Library, University of Montana.
- 4 -
Plaza Hotel in New York City, at which time our Secretary of
the Treasury, Mr. Jim Baker, and your Secretary of Finance, Mr.
Takeshida, along with three of their colleagues entered into an
agreement to cope with the divergences in the exchange rate.
That was a excellent move. The results have been good an~
incidentally, I believe the genesis could be found in the
meetings in Tokyo last June or July between our Treasury
Secretary and your Finance Minister. So that's working out.
On the matter of interest rates, that 1s an American
responsibility.
responsibility.
On the matter of deficits, that is an American
So there are things which we can do, which
will benefit each other, perhaps hurt in the process, but I
think we've got to recognize that the important thing is to
save the international trading system which has been so
beneficial to Japan and which would be very disastrous to Japan
if it ever broke down and do so in the interest of the well
being of the rest of the world, not just ourselves alone.
I think the more Japanese investment we get in the United
States the better of we'll both be. But I think that's
something which should work both ways. We'd like to see more
U.S. investments in Japan. \fuen I was on home leave in the
latter part of October and almost all of November, I had the
opportunity to meet with about 26 members of the Senate almost
all of them old colleagues of mine, a few new ones, the joint
leadership there and the joint leadership in the House of
Mike Mansfield Papers, Series 32, Box 3, Folder 31, Mansfield Library, University of Montana.
- 5 -
Representatives plus some of its members. The feeling I
detected was one of onus and continued frustration about the
trade inbalance between Japan and the United States. I seemed
to detect also that, while there was a feeling of quite, that
there was an uncertainty as to just what the Congress would do
to face up to its problem. lfhat I am trying to say in effect,
that perhaps we have moved away from considering the trade
problem as an economic issue and must recognize that economics
in that respect has become politicized and emotionalized. An0
that of course takes you out of the realm of facts and figures
and brings you into the realm of elections and re-eJections in
the light. So I would hope that on the basis of what we have
said here this afternoon I find myself agreeing in large part
with Mr. Inayama and Mr. Ezaki, old friends whom have known for
year, whose judgments I value greatly and that we have to
consider extra factors beyond the economics of the situation
and if necessary in both countries make the necessary political
sacrifices to try to put this oroblem behind us. It is not
going to go away easily. It is qoing to become worst before it
gets better. And my hope is that if we can get by the next
year and each in our country's do what has to be done, opening
markets in this country, coping with the deficit in my country,
that we'll be able to reach a reasonable conclusion,
accommodation or compromise in our difficulties. It is a tough
job and it is going to call on all the politicians have to deal
with it. Incidentally, I think that the only person standing
between protectionist legislation and its enactment in the
Mike Mansfield Papers, Series 32, Box 3, Folder 31, Mansfield Library, University of Montana.
- 6 -
United States is President Reagan. But his defenses are
becoming weaker as the Congress offenses become stronger and as
a result he has to give here and give there. But at least he's
maintained the line so far in preventing protectionist
legislation in my countrv and it would help him greatly to
continue to do so if we could have far greater access to the
markets of Japan than we have at the present time. But it is a
pleasure to appear on a program of this nature with such
friends of integrity, knowledge and understanding as Mr.
Inayama and Mr. Ezaki.
Thank you very much it has been a pleasure.
side deficiencies, on your side access.
Remember on our
Mike Mansfield Papers, Series 32, Box 3, Folder 31, Mansfield Library, University of Montana.